Payday Loan Rule of 2020 – Things just keeping bleaker for many people, affected by the COVID-19 pandemic as families lose jobs, workers get their hours cut back significantly, and landlords threaten to evict families out of their homes.
In July of this year, the Trump administration reversed a major policy by the Consumer Financial Protection Bureau, a little-understood Bureau with enormous power to regulate Banks, Credit Unions, mortgage collection, debt collection, and payday lenders.
In 2017, calling payday loans debt traps, the Consumer Financial Protection Bureau drafted new laws, the principal one being that Payday Lenders were required to ensure that borrowers could afford to pay by their loans by checking their income sources, their rent, and even their student load agreements.
The Trump administration halted these requirements for a long review and in July of this year, completely overturned them and essentially told Payday lenders it was business as usual.
A typical payday loan of around $400 for some borrowers is around 390 percent, which means that for that $400 payment, the payment is around $60 for two weeks. Compared to borrowing on credit cards, where the interest rate is typically around 18 percent, this is costly money.
However, the Consumer Financial Protection Bureau as well as credit experts, over 80 percent of payday borrowers cannot pay their initial loan off on time and need to roll over their loans as an extension. Before you know it, a 400 loan becomes $480, and when rolled over, it jumps up to $560 or more.
Many consumers roll over their loans three and four times. And believe it or not, the average consumer who resorts to payday loans has not one but actually 2,8 loans. Around 20 percent have 6 payday loans according to Debthammer.org.
How big is the Payday industry? Huge.
According to the Consumer Financial Protection Bureau, 23 million borrowers took out over $20 billion dollars worth of payday loans in 2019 alone, and they paid more than $9 billion dollars worth of fees and interest.
There are more than 23,000 Payday loan establishments, more than twice the number of McDonald’s restaurants in the United States. They gross an average of $340,000 dollars per payday store.
Worse yet, while local physical payday stores may be on the shady side but at least they have a license, many online payday stores are neither licensed nor follow state laws.
For example, there are 11 Indian tribes that make huge amounts of payday loans to consumers, all them fully unregulated because Indian tribes make their own sovereign rules.
With all of the above information, it won’t be surprising, therefore, to realize that thousands of payday borrowers are stuck in seemingly endless bottomless pits of debt and need a Payday loan relief company to help them out.
What does a payday loan relief company do?
At National Payday Loan Relief, we start by creating a payday loan debt settlement program you can live with. National Payday Loan Relief has worked with thousands, and we can work with you.
First, realize that your payday loan company will probably tell you outright they don’t work with payday loan relief programs.
First, if they play hardball with you, National Payday Loan Debt Relief counselors will explain to them, politely but firmly that the choice is theirs, accept a reasonable Payday loan debt consolidation now, or get stiffed for the whole debt.
The reason this works is that National Payday Loan Debt relief counselors know that payday loan companies are all bark and no bite.
At National Payday Loan Relief, we explain that their choices are:
- 1. To sue you for the money in court.
- 2. To report your loan to credit companies as a bad debt & ruin credit scores
- 3. To cry a river and try to drum up other payday loan customers.
Payday companies know that unless you have size-able assets, that suing you in court will cost them a minimum of $1,000 or more, and most often they will get nothing for the suit.
At the same time, while ruining your credit history may be a vindictive act, it doesn’t get them any closer to getting paid.
National Payday Loan Relief understands that while there may be a few bad apples among payday loan customers, that there are a great many that sincerely wish to pay their debt and actually build up their credit, not knock it down.
By working with NPDLR, thousands have followed Payday loan relief programs that fit into their budget. There is light at the end of the payday tunnel and our Payday Loan Debt Settlement counselors can get you there.
Understanding Between Payday Loan Debt Consolidation & Payday Loan Debt Settlement
A Payday Loan Debt Settlement is a cash offer to settle your debt clean and clear. If you have recently been able to find the money, National Payday can approach a payday company on your behalf and offer to settle your debt at a significant discount.
Because this will clear the loan entirely off of their books and because they have relatively little leverage, often they will agree to settle your debt to original debt plus a small processing fee.
However, most people do not have the money to pay their debt all at once and need a Payday loan debt consolidation program. Here, National Payday Relief will negotiate a small monthly payoff program where you pay off your debt in 1 to 3 years.
A Payday loan debt consolidation is often not only better to make sure you get back to a solid financial footing, but it is better for your credit as well.
Your loan remains on the books, and if you are paying back your debt regularly, it will be reflected positively on your credit report.
Why are legitimate Payday loan relief programs essential?
Simply because we are firm but patient and know the law, you stand a much better chance and negotiating your payday debt using a debt consolidation company.
You avoid all the lies that payday companies will throw at you such as the sheriff will come and put you in jail, and you avoid overpaying to settle your debt.
We guide you through the process and help provide you relief. One thing we do is advise you to close your bank account and opening up a different bank account somewhere else.
The reason is that most payday companies require you to make your payment through a bank account, and once they tap into your account, they may well try to tap into it again.
A common trick, if you don’t close that account is to break your loan up into smaller withdrawals, getting some of the money and also triggering overdraft fees at the bank.
Another thing is to stop collections from the start, particularly if you have a job and the payday company or collectors try to contact you on the job.
We will send a cease and desist letter for all telephone calls to stop and should the collectors try to collect anyway, there are heavy fines which a lawyer can help you collect for illegal debt collection efforts.